According to Reuters, Madewell, J.Crew's hipper sibling, might be spinning off from its parent company, which has roughly $2 billion in debt and $49.2 million in cash. The separation would allow the company's private equity owners to gain value, according to sources familiar with the situation. On the other hand, it would anger creditors, who would lose the fastest-growing segment of the company.
J.Crew has gone through several reinventions over the last few years, but has struggled to retain a core customer base. Meanwhile, Madewell, a small workwear company founded in 1937, which J.Crew relaunched in 2006, has had a consistent following among younger consumers. While J.Crew's sales were $2.1 billion last year, Madewell's were only $301 million. ES